Barings Bdc, Inc. · NYSE:BBDC
Barings Bdc — Q1 2024 Earnings Presentation
24 slides from Barings Bdc's earnings presentation, May 8, 2024
Slide 1: Barings BDC, Inc. First Quarter 2024 Earnings Presentation
MAY 8, 2024 Barings BDC, Inc. First Quarter 2024 Earnings Presentation
Slide 2: Disclaimers & Cautionary Notice Regarding Forward-Looking Statements
Disclaimers & Cautionary Notice Regarding Forward-Looking Statements Cautionary Notice: Certain statements contained in this presentation are "forward-looking" statements. Investors are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date on which they
Slide 3: Agenda
Agenda 1Q 2024 HIGHLIGHTS (LLOYD) ERIC LLOYD Summary points of the quarter. MATTHEW FREUND BARINGS BDC MARKET UPDATE & INVESTMENT PORTFOLIO (FREUND) Update on the portfolio performance. BRYAN HIGH ELIZABETH MURRAY BARINGS BDC FINANCIALS (MURRAY) A walk through the balance sheet, income statement, NA
Slide 4: Who We Are: Barings Overview
BARINGS OVERVIEW Barings is a global asset management firm that works with institutional, insurance Who We Are and intermediary clients to provide excess returns across public and private markets in fixed income, real assets and capital solutions. External AUM by Region1 EMEA 28% Americas 43% Asia P
Slide 5: Barings BDC Franchise
Sponsor Backed Investments Barings BDC Franchise What is it? Financing the Typical Terms operating companies of issuers • <50% Loan to Value Owned by Private Equity • Maintenance Covenants firms • EBITDA between $15 and Private credit expertise delivering $75 million comprehensive exposure to the As
Slide 6: First Quarter 2024 Highlights
First Quarter 2024 Highlights Net asset value (NAV) Total originations during the as of March 31, 2024 quarter were $142 million, NET ASSET was $11.44 per share as ORIGINATIONS while sales and repayments VALUE compared to $11.28 per totaled $119 million, for net share as of deployments of $23 millio
Slide 7: Selected Financial Highlights
Selected Financial Highlights Balance Sheet Highlights 1Q 2024 4Q 2023 3Q 2023 2Q 2023 1Q 2023 Investment Portfolio, at Fair Value $2,527.5 $2,488.7 $2,521.6 $2,505.9 $2,556.1 Total Debt Outstanding (Principal) $1,465.4 $1,444.9 $1,521.1 $1,497.1 $1,494.1 Total Net Assets (Equity) $1,211.9 $1,196.6
Slide 8: Portfolio Highlights
Portfolio Highlights Senior Secured Focus $2.53B 337 PORTFOLIO SIZE ISSUER COUNT 4% 4% 16% First Lien Second Lien Mezzanine Equity 73% 87% 4% Structured 6% JV 66% SECURED DEBT FLOATING RATE 626 BPS 11.3% Diversified Industry Exposure WEIGHTED AVERAGE YIELD Finance & Insurance SPREAD 16% Services: Bu
Slide 9: Portfolio Composition
Portfolio Composition Investment Portfolio by Issuer Investment Portfolio Strategy1 • Barings BDC maintains a highly diversified portfolio, with the top • BBDC’s existing investments are substantially consistent with our issuer accounting for 6.1% of exposure and the top 10 issuers long-term strateg
Slide 10: Portfolio Composition Trends
Portfolio Composition Trends Consistent Focus on Secured Investments Active Rotation to Barings Originated Loans • Barings BDC has consistently been comprised largely of secured • Barings BDC is driving towards a portfolio focused on investments. When accounting for the look-through exposure of secu
Slide 11: Risk Rating Trends
Risk Rating Trends 1 Issuer performing materially above expectations Portfolio performance is reflected in the shifts 2 Issuer performing consistent with expectations between the risk rating categories shown at right 3 Issuer performing modestly below expectations Non-Accruals comprise approximately
Slide 12: Credit Support Agreements
Credit Support Agreements What are the Credit Support Agreements (CSAs)? How will Barings LLC compensate Barings BDC investors for the losses? The CSAs are a form of manager support between Barings LLC and BBDC created in connection with the acquisitions of MVC and Sierra. First, Barings LLC will wa
Slide 13: Credit Support Agreements
Credit Support Agreements Based on current portfolio valuations, the Sierra CSA and the MVC CSA insulate BBDC shareholders from a meaningful portion of credit losses in the acquired portfolio Sierra Income CSA MVC Capital CSA REMAINING ISSUERS — 36 REMAINING ISSUERS — 4 $100.0 $100.0 $100.0 $80.0 $8
Slide 14: BBDC Focuses on Shareholders
BBDC Focuses on Shareholders INCENTIVE FEE HURDLE RATE CREDIT SUPPORT AGREEMENTS Hurdle Rate 8.50% 8.00% $123 • BBDC Hurdle Rate: 8.25% 7.50% • Barings made a commitment to million • Average Externally- 7.00% protect investors supporting credit from certain losses Managed Public 6.50% emanating from
Slide 15: BBDC Net Asset Value (NAV) Per Share Bridge
BBDC Net Asset Value (NAV) Per Share Bridge BBDC’s NAV per share increased in 1Q24 to $11.44 (March 31, 2024) from $11.28 (December 31, 2023), an increase of 1.4%, driven primarily by net investment income exceeding the dividend and net unrealized appreciation, partially offset by net realized losse
Slide 16: BBDC Income Statement
BBDC Income Statement (In thousands, except share and per share data) 1Q24 4Q23 3Q23 2Q23 1Q23 Invest ment income: Interest incom e $54 ,53 3 $57 ,06 9 $55,4 05 $55,4 2 4 $51 ,89 0 Div idend incom e 8,4 7 7 1 0,2 7 7 8,51 5 1 0,2 50 7 ,87 4 Fee and other incom e 3 ,4 7 4 3 ,1 52 2 ,6 50 4 ,3 01 3 ,3
Slide 17: BBDC Balance Sheet
BBDC Balance Sheet Debt-to-equity at March 31, 2024 was 1.21x, or 1.17x after adjusting for unrestricted cash and foreign currencies and net unsettled transactions March 31, December 31, September 30, June 30, March 31, 2024 2023 2023 2023 2023 Assets: Investments at fair value: Non-Control / Non-Af
Slide 18: BBDC Debt Summary & Maturity Profile
BBDC Debt Summary & Maturity Profile As of the end of the quarter, BBDC’s outstanding debt was split approximately 70/30 between unsecured and secured debt as a result of the recent unsecured issuance As of 3/31/2024 As of 12/31/2023 As of 9/30/2023 As of 6/30/2023 Principal Principal Principal Prin
Slide 19: BBDC Dividends Declared Per Share
BBDC Dividends Declared Per Share $0.28 $0.26 $0.26 $0.26 $0.26 $0.26 $0.25 $0.25 $0.24 $0.24 $0.24 $0.24 $0.23 $0.22 $0.22 $0.21 $0.20 $0.20 $0.19 $0.18 $0.17 $0.16 $0.16 $0.16 Barings BDC $0.16 $0.15 declared a 2Q $0.14 $0.13 $0.14 2024 dividend of $0.12 $0.12 $0.26 per share, $0.10 $0.10 unchange
Slide 20: Appendix
Appendix
Slide 21: Reconciliation of Debt-to-Net Debt & Calculation of Net Debt-to-Equity Ratio
Reconciliation of Debt-to-Net Debt & Calculation of Net Debt-to-Equity Ratio March 31, December 31, September 30, June 30, March 31, 2024 2023 2023 2023 2023 Total debt (principal) $1,465,352 $1,444,914 $1,521,126 $1,497,087 $1,494,112 minus: Unrestricted cash and foreign currencies (50,740) (70,528
Slide 22: Barings BDC Corporate Data
Barings BDC Corporate Data BOARD OF DIRECTORS MANAGEMENT TEAM RESEARCH COVERAGE GENERAL Eric Lloyd Eric Lloyd Bank of America Corporate Headquarters Executive Chairman & CEO of BBDC, Chief Executive Officer Merrill Lynch 300 South Tryon Street President of Barings Derek Hewett Suite 2500 Matthew Fre
Slide 23: Important Information
Important Information Barings LLC, Barings Securities LLC, Barings (U.K.) Limited, Barings Australia Pty Ltd, Barings Japan Target performance is theoretical and illustrative only, and does not reflect actual performance. There is Limited, Baring Asset Management Limited, Baring International Invest
Slide 24: Barings: Investing Together
BARINGS Investing Together PUBLIC & PRIVATE FIXED INCOME | REAL ESTATE | SPECIALIST EQUITIES